DFS Consolidated Balance Sheets

Debs2809Debs2809 Feels At HomePosts: 42Registered
Can someone please refresh my memory on how to do the 5 workings needed in a consolidated balance sheet, goodwill etc...
I'm doing my second resit this week. Passed section 1 in June but failed section 2....
Have now got a 4 month old little girl and finding it hard to remember things....
Any help is very much appreciated...

Comments

  • definite.studiesdefinite.studies Feels At Home Posts: 88Registered
    You might find the discussion here useful. :001_smile:

    http://forums.aat.org.uk/showthread.php?t=19869
  • mark130273mark130273 Font Of All Knowledge Posts: 4,234Registered
    Consolidated balance sheet
    This question is not about adding across the two balance sheets but 85% of the marks are allocated to the 5 workings that you MUST show to an examiner
    Working 1- Relationship (5%)
    Show what percentage dos the Parent company owns of the subsidiary. Say 75% (A)

    Working 2 (2 parts) – Valuation of S- subsidiary at Acquisition date and Balance sheet date (40%)
    Share Capital…………………………………@ A date……………………………………..……………………@ b/s date
    Share Premium……………………………[email protected] A date……………………………………………………………@ b/s date
    Retained profit & loss…………………@ A date……difference= this years profit…(B)…… @ b/s date
    Property Valuation……………………[email protected] A date…………………………………………………………[email protected] b/s date
    Total value of S at ……………….Acquisition Date…(C)……………………………………….Balance sheet Date (D)

    Working 3 Goodwill calculation (20%)
    Valuation of S at the acquisition date (C) in working 2 times (A) in working 1 = Value of S acquired (E)
    Payment for the investment in the Subsidiary (from P’s balance sheet) less Value of S acquired (E) equals GOODWILL.
    GOODWILL less amortisation (E) equals GOODWILL to be shown in the consolidated balance sheet.

    Working 4 – parent’s company’s Profit & loss A/C (15%)
    P’s Retained profit and Loss
    Plus (this year’s profit of S (B) in working 2 times (A) in working 1)
    Less goodwill amortisation (E) from working 3
    Equals Retained profit for the Parent company to be shown in the consolidated a/c

    Working 5 – Minority interest (5%)
    Valuation of S at the balance date (D) from working 2 times the minority % This working will go as a minority interest on the consolidated balance sheet.

    Consolidated Balance sheet of the GROUP as at DATE (15%)
    Non-Current assets
    Goodwill ( NET of amortisation) from working 3 (E)
    Total of premises of both P & S plus Revaluation (5%) (students very often forget this)
    Total of other fixed assets of both P & S

    Current assets
    Total of Current assets of both P & S

    Non Current assets
    Total of Non-Current assets of both P & S



    Represented by ( ONLY FIGURES FROM P’s Balance Sheet) (5%)
    P’s Share Capital
    P’s Share premium
    P’s Retained Profit – working 4
    S’s minority interest – working 5

    Consolidated completed and balanced.
  • fpettiferfpettifer Feels At Home Posts: 40Registered
    Now let's see if i can remember (was revising so much yesterday)

    1 - Layout the group structure

    2 - Net assets of the subsidiary at acquisition date and balance sheet date.

    Acq. BS
    Share Capital x x
    Share premium x x
    Revaluation x x
    Retained earnings x x
    X X

    3 - Calculation of Goodwill

    Parent cost of shares to buy subsidiary x
    Less Parent % share of sub. net assets @ acq. date (x)
    X

    4 - Minority interest

    Remaining % share x net assets of sub. @ BS date = £xxx

    5 - Retained Earnings

    100% Parent share capital x
    Parent % share of sub. retained earnings between acq. x
    and BS date
    X
    Impairment loss x
    X

    I think that's right, if not I best get back to revising!! oooo layout a bit funny...
  • Debs2809Debs2809 Feels At Home Posts: 42Registered
    Are you able to post me a worked example. I sat DFS in June and surpisingly passed section 1 but failed section 2 now I can't remember the logic behind the workings...
  • peugeotpeugeot Experienced Mentor Posts: 624Registered
    I wrote an article here which might help you. I don't think the IFRS 3 changes are examinable at AAT but it helps explain the purpose of the consolidated balance sheet.

    I hope it helps you.

    Kind regards
    Steve
  • sarah_dsarah_d New Member Posts: 10Registered
    here is how i do it...it it is any use?

    1. share holding in sub.

    shares aquired/share captial of sub x 100

    2. fair value adjustment

    fair value of NCA x
    NBV NCA (x)
    gives you fair value adjustment

    3. net asset working

    Copy out everything in the equity section of the balance sheet as your rows usually...adding fair value adjustment to the end. your coloumns are NA @ aquisition, NA @ Consolodation and post aquisition

    [email protected] AQU [email protected] CON post AQU
    share captial
    share premium
    retained earnings
    fiar value adj
    1 2 2-1

    the middle coloumn can be copied out of the sub's balance sheet. the sopts of info usually tell you that there was no change in the share capital and preium in the year so they will be the same for the first colomn. Retained earnings at aquisition is in a spot of info too. fair value (you have just calculated) same for both 1 and 2. 3rd colomn is just 2-3 (usually just the difference in the retained earnings. put totals at the bottom of each colomn.

    Keeps things nice and tidy. and the totals then just feed into goodwill minority interest and consolodated retained earnings as follows...

    4. goodwill

    investment figure taken from holing co. b/sheet x
    less %share of NQ at aquisition (1) (x)
    goodwill before impairment x
    impairment (if spot tells you) (x)
    Goodwill figure for b/sheet x

    5.Minority interest
    The bit we don't own % of colomn 2 eg. we have 60% so minority have 40% of colomn 2.

    6. consolodated retained earnings.
    Retained earnings of holding co(taken from B/sheet) x
    plus our % share of colomn 3 x
    less goodwill impairment (if any) (x)
    Retained earnings for consolodated B/sheet x

    Does that make sence or have i just confused the pants off people? does the job for me. simple to remember, and lots of 'free marks' as most of it involves copying figures from the paper and adding them up in colomns.
  • sarah_dsarah_d New Member Posts: 10Registered
    ok ignor my 1 2 and 3's i put spaces in when typing to show the colomns, but they aren't there once posted.
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